TMI Blog2018 (4) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/CIT(A)-20/CC-2(3)/15-16, dated 08.11.2016, which in turn arises out of a penalty order passed by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 28.09.2015. 2. In this appeal the Revenue has challenged the order of CIT(A) whereby the CIT(A), partly confirmed the order of AO, imposing penalty on the assessee u/s 271(1)(c) of the Income Tax Act, 1961 (Act). 3. The facts and circumstances under which penalty u/s 271(1)(c) of the Act was imposed on the assessee, by the AO, are briefly stated as follows. A search and seizure operation was conducted in respect of Agarwal Gourisaria Sub-Ground of cases on 13.02.2013 and on subsequent dates. M/s Hi-Life Traders Pvt. Ltd. is one of the assessees of this group. The assessee filed her return of income for the Assessment Year 2013-14 on 30.09.2013 declaring a total income of ₹ 2,85,77,580/-. Assessment u/s 143(3) of the Act was completed on 31.03.2015 at a total income of ₹ 2,86,09,120/-. In consequence of the search operation, the assessee admitted an undisclosed income of ₹ 2,85,00,000/-. Therefore, the AO noted that since the assessee has admitted the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own decision in the case of CIT vs Manjunatha Cotton and Ginning factory (2013) 359 ITR 565 took a view that imposing of penalty u/s 271(1)(c) of the Act is bad in law and invalid for the reason that the show cause notice u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The ld. Counsel further brought to our notice that as against the decision of the Hon ble Karnataka High Court the revenue preferred an appeal in SLP in CC No.11485 of 2016 and the Hon ble Supreme Court by its order dated 05.08.2016 dismissed the SLP preferred by the department. The ld. Counsel also brought to our notice the decision of the Hon ble Bombay High Court in the case of CIT vs Shri Samson Perinchery in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon ble Bombay High Court following the decision of the Hon ble Karnataka High Court in the case of CIT vs Manjunatha Cotton and Ginning factory (supra) came to the conclusion that imposition of penalty on defective show cause notice without specifying the charge against the assessee cannot be sustained. Our attention was also d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the proposal to levy penalty in order to enable him to explain as to why it should not be done. Mere mistake in the language used or mere nonstriking of the inaccurate portion cannot by itself invalidate the notice. The ITAT Mumbai Bench in the case of Dhanraj Mills Pvt.Ltd. (supra) followed the decision rendered by the Jurisdictional Hon ble Bombay High court in the case of Kaushalya (supra) and chose not to follow decision of Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra). Reliance was also placed by the ITAT Mumbai in this decision on the decision of Hon ble Patna High court in the case of CIT v. Mithila Motor's (P.) Ltd. [1984] 149 ITR 751 (Patna) wherein it was held that under section 274 of the Income-tax Act, 1961, all that is required is that the assessee should be given an opportunity to show cause. No statutory notice has been prescribed in this behalf. Hence, it is sufficient if the assessee was aware of the charges he had to meet and was given an opportunity of being heard. A mistake in the notice would not invalidate penalty proceedings. 10. In the case of Earthmoving Equipment Service Corporation (supra), the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is valid and legal? 2. Whether the proceedings initiated by the Assessing Authority was legal and valid? The Hon ble Karnataka High Court held in the negative and against the revenue on both the questions. Therefore the decision rendered by the ITAT Mumbai in the case of Earthmoving Equipment Service Corporation (supra) is of no assistance to the plea of the revenue before us. 11. In the case of M/S.Maharaj Garage Co. Vs. CIT dated 22.8.2017 referred to in the written note given by the learned DR, which is an unreported decision and a copy of the same was not furnished, the same proposition as was laid down by the Hon ble Bombay High Court in the case of Smt.Kaushalya (supra) appears to have been reiterated, as is evident from the extracts furnished in the written note furnished by the learned DR before us. 12. In the case of Trishul Enterprises ITA No.384 385/Mum/2014, the Mumbai Bench of ITAT followed the decision of the Hon ble Bombay High Court in the case of Smt.Kaushalya (supra). 13. In the case of Mahesh M.Gandhi (supra) the Mumbai ITAT the ITAT held that the decision of the Hon ble Karnataka High Court in the case Manjunatha Cotton Ginning (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Manjunatha Cotton Ginning (supra). 15. We have already observed that the show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. 16. In the result the appeal of the assessee is allowed. 6. We note that the facts of the assessee under consideration are similar to the facts stated in the decision of the Coordinate Bench of ITAT, Kolkata in the case of Jeetmal Choraria vs. ACIT, Circle-43, Kolkata (supra), that is, there is no change in facts and law and ld DR for the Revenue has failed to controvert the findings of the decision of the Coordinate Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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